Interest subsidy on Rs.15 lakh housing loan: Mukherjee (Lead)

New Delhi, Feb 28 (IANS) In a boost to the housing sector, low-cost housing loans of up to Rs.15 lakh would be eligible to get an interest subsidy of one percent, Finance Minister Pranab Mukherjee Monday said.”To further stimulate growth in the housing sector, I am liberalising the existing scheme of interest subvention on one percent on housing loans by extending housing loan up to Rs.15 lakh where the cost of the house does not exceed Rs.25 lakh,” Mukherjee said.

According to Mukherjee, the interest sop will help the sector by extending the existing subsidy of Rs.10 lakh where the cost of the house does not exceed Rs.20 lakh.

Meanwhile, the industry has given a positive response to the interest subsidy.

“We welcome the measures to promote the development of affordable housing… it will certainly aid in boosting the demand and development of affordable housing in the coming months,” said Sanjay Chandra, managing director of Unitech.

The finance minister also gave some relief to the cement industry, a key component in the construction sector, with reduction in the custom duty for two main raw materials used in the industry.

“As a measure of relief to cement industry… the basic customs duty on two critical raw materials of this industry, petcoke and gypsum, is proposed to be reduced to 2.5 percent,” Mukherjee said in his budget speech.